New York (HedgeCo.Net) – For the first time in SEC history the agency has deferred prosecution against a former hedge fund administrator who helped the SEC take action against a hedge fund manager who stole investor assets.

The SEC agreed to a deferred prosecution agreement (DPA)* with Scott Herckis when he helped them secure an emergency enforcement action against Berton M. Hochfeld, the founder of Connecticut-based hedge fund Heppelwhite Fund LP.

Hochfeld is accused of misappropriating more than $1.5 million from the hedge fund and overstating its performance to investors.

“With voluntary and significant cooperation from Herckis, the SEC filed The SEC’s action halted the fraud and froze the hedge fund’s assets and Hochfeld’s personal assets, which are now being used to compensate defrauded investors. Last month, a federal court judge approved a $6 million distribution to harmed Heppelwhite investors.” The SEC said. “Herckis voluntarily produced voluminous documents and described to the SEC how Hochfeld was able to perpetrate his fraud. As a result, the SEC was able to file the emergency action within weeks.”

Herckis still has to comply with certain prohibitions, he can’t serve as a fund administrator or provide services to hedge funds for five years, he also cannot associate with any broker, dealer, investment adviser, or registered investment company. The DPA requires Herckis to disgorge approximately $50,000 in fees which will be added to the Fair Fund that has been set up to help compensate Heppelwhite investors.

*DPA’s encourage individuals and companies to provide the SEC with forthcoming information about misconduct and assist with a subsequent investigation. In return, the SEC refrains from prosecuting cooperators for their own violations if they comply with certain undertakings.